Supermarket of Homes v. San Fernando Valley BOR: Federal Court Finds Copyright Violation by Member for Distribution of MLS Listings Without Permission From Board

In Supermarket of Homes v. San Fernando Valley Board of REALTORS®, the district court found for the Board on its counterclaim and cross-claim, and held that the plaintiff's actions constituted misuse of copyright.

Williams was president of Supermarket of Homes, Inc. (Supermarket), Bar W Properties (Bar W), and Original Supermarket of Homes, Inc. (OSHI). Williams was a licensed broker and member of the Board and its MLS. Through her three companies (all four collectively "plaintiffs"). During all relevant times, the Board distributed MLS pamphlets, books, and computer printouts to members. Williams, a member with MLS access, sought to distribute this information to the public, but was denied permission to do so by the Board, as MLS information was considered confidential and copyrighted. Despite the lack of permission to distribute MLS information, Williams distributed or sold photocopies of listings to the public. The Board cross-claimed to enjoin Williams from such distribution or sale, but the state court denied their preliminary injunction. The Board then filed a cross-claim in federal court, seeking to enjoin Williams' sale of their copyrighted material.

The district court found Williams may have sold as many as 672 photocopied MLS sheets. The court also found that the plaintiffs' distribution of the sheets was made with full knowledge and awareness of the Board's copyright and confidentiality claims, and that the Board had not granted permission, license or consent to anyone to copy or make public distribution of the sheets. The court added that at all times, the Board's MLS rules prohibited the sale or distribution of MLS information to those who were not participants in the MLS, and that Williams expressly agreed to these rules when she joined the Board. Additionally, the court found that the plaintiffs had been treated by the Board in the same manner as all other MLS participants, and that there was no discrimination against them.

The district court concluded that the Board had a valid, enforceable copyright in its MLS sheets and printouts, and that the plaintiffs had infringed numerous copyrights. The court also concluded that the MLS rules constituted a valid contract which was breached by the plaintiffs each time they sold or distributed MLS information to the public. The court held that the plaintiffs' sales or distributions did not constitute fair use of the information. The court also held that the Board did not breach any contract with any of the plaintiffs, that the Board's rules were not vague, contradictory, or ambiguous. The court granted the Board summary judgment on the amended counterclaim and cross-claim, and reserved for further determination the remedies and relief to be granted to the Board.